Innovate With What You Have

A standard methodology taught in every entrepreneurial training program is the SWOT – an analysis of strengths, weaknesses, opportunities and threats. But perhaps because it is so common, it often becomes a token exercise. A Kelowna company has taken the SWOT concept to heart and used it to create an innovative business that promises to act as a template for a new green economy in the B.C. hinterland. Problem RackForce Networks Inc. is a privately held mid-sized data-storage and server-space provider with three data centres and about 25 employees. But because it is in Kelowna, the company was condemned to remain that size forever. While growing in population and technology skills, Kelowna is still small by global standards, and isolated from large population centres. RackForce had customers around the world, but many obvious potential customers closer to home, specifically in Vancouver, were shunning it. It suffered from the Vancouver disease: a distrust of any service business that isn’t local. Couple that with the tendency to want to own everything yourself, including all IT, and the fact that most Vancouver-area IT departments shy away from renting server space or storing data in “distant” Kelowna. But RackForce, with the help of partner IBM Corp. (IBM), was able to recognize an opportunity in those challenges. As Internet use booms globally due to the growing prevalence of social networking, video and other communications, the world is rapidly running out of safe and reliable data storage space. And outsourcing over long distances? No problem. Solution But there were other problems. Data centres are massive users of electricity, most of it created by power plants that use coal or natural gas to fuel their generators. With that power generation comes a lot of carbon dioxide emissions, a countervailing force to the demand for growth in these greener days. Kelowna lies along a major electrical transmission route, and so has access to relatively cheap power. Plus, that power is for the most part generated by hydro, which does not create significant carbon emissions and thus is considered green. So RackForce had two strengths despite, or because of, its location in Kelowna. And there was a third strength: Kelowna is located in an extremely stable geological area, meaning its risk of earthquake is close to nil. So all the strengths were there for RackForce to take advantage of this new 21st-century industry – data storage. All it needed was a suitable location for a large facility that had electricity nearby. Last year it found it in the huge Western Star truck manufacturing plant, which had been idled after an acquisition by an American company. As a result, RackForce is now building GigaCENTERS, a $75-million, 495,000-square-foot data centre that will be among the biggest in the world. And it’s doing it in such a way that it can cut heat production by 40 per cent and maximize power usage to extreme efficiency standards. So it can undercut data storage costs of global competitors, negating the cost of any data transmission distance that has to be conquered. Technology-heavy clients worldwide are already starting to line up on the world’s fibre optic pipelines to rent storage space in the new outsourcing centre in “isolated” Kelowna, which will open in December. “The world is running out of data centre space – it’s the new oil, and we’re kind of sitting on a huge oil field,” explains Brian Fry, vice-president of RackForce and a partner in the new GigaCENTERS. “We’re already looking at creating more GigaCENTERS.” Lessons • Innovate while you analyze. You can’t steer a boat until it’s moving, so get it moving by looking for innovation opportunities while you do your business analysis. • Innovate through different lenses. Most weaknesses can be strengths if viewed from different perspectives and put into different analytical frameworks. • Innovate through what you learn. RackForce came up with its innovative idea by learning what was needed from its customers and allies and then synthesizing that into a solution.